Investor Relations

Press Release

ConnectOne Bancorp, Inc. Reports Third Quarter 2016 Earnings

Company Release - 10/25/2016 7:00 AM ET

ENGLEWOOD CLIFFS, N.J., Oct. 25, 2016 (GLOBE NEWSWIRE) -- ConnectOne Bancorp, Inc. (Nasdaq:CNOB) (the “Company” or “ConnectOne”), parent company of ConnectOne Bank (the “Bank”), today announced results for the third quarter ended September 30, 2016.  The Company reported net income available to common stockholders of $11.9 million, or $0.39 per diluted share, compared with net income available to common stockholders of $10.9 million, or $0.36 per diluted share, for the second quarter of 2016 and $10.8 million, or $0.36 per diluted share, for the third quarter of 2015.

Highlights

  • Organic loan origination remained strong.  Gross loan fundings were $228.7 million for the 2016 third quarter, compared with $238.4 million for the sequential quarter. Net loan growth (fundings less paydowns and payoffs) was $84.6 million for the 2016 third quarter and $112.2 million for the sequential quarter. The loan pipeline remains solid heading into the 2016 fourth quarter.
     
  • The efficiency ratio improved to 41.7% in the 2016 third quarter from 42.2% in the sequential quarter reflecting improved operating leverage.  During the 2016 third quarter, total revenue, excluding securities gains, increased by an annualized 10.8%, while operating expenses increased by an annualized 5.5%.
     
  • Total average deposits grew by 9.2% sequentially during the quarter, including 10.1% growth in average noninterest-bearing deposits. The loan to deposit ratio was 105.9% at quarter-end.
     
  • Already sound asset quality metrics improved even further.  The nonaccrual loan ratio declined during the 2016 third quarter to 0.33% from 0.65% in the sequential quarter, while the allowance as a percent of nonaccrual loans increased to 327.3% during the 2016 third quarter from 149.5% in the sequential quarter.
     
  • We enhanced financial flexibility by designating all held-to-maturity securities as available-for-sale.  The action improves liquidity and results in an immediate pickup in tangible book value per share of approximately $0.25.
     
  • We sold approximately $75 million of investment securities, resulting in net securities gains of $4.1 million. A portion of the proceeds to be invested in securities and bank-owned life insurance (“BOLI”), and projected to result in de minimis earnings dilution.
     
  • We added an additional $5 million in reserves against our NYC-only taxi medallion portfolio, bringing the total specific reserve to 12.2% of outstanding taxi medallion loans.  Although weakness persists in open-market transactions for medallions, the NYC taxi industry has recently exhibited some signs of stabilization.  More than 95% of the Bank’s approximately $100 million medallion portfolio is current.
     
  • Tangible book value per share increased to $11.60 per share at September 30, 2016 from $11.09 at June 30, 2016 while the tangible common equity ratio increased to 8.39% from 8.14% over the same period.

Frank Sorrentino, ConnectOne’s Chairman and CEO stated, “Operating performance continued to accelerate during the third quarter of 2016, while we took a series of actions likely to result in improved shareholder value.  We fortified our balance sheet by setting aside an additional $5 million of reserves for our NYC-taxi medallion portfolio.  We changed the designation of approximately $210 million in held-to-maturity securities to available-for-sale and sold $75 million for a more than $4 million gain, thus adding liquidity, increasing capital ratios, and increasing tangible book value per share.  We also resolved a large nonperforming asset in a cash transaction that contributed to lowering our September 30, 2016 nonperforming asset ratio to 0.28%. For the current quarter, return on assets was in excess of 1%, return on tangible equity was in excess of 13%, and the efficiency ratio was 41.7%, placing us among the best performing banking institutions. Additionally, we continue to see increased opportunities in our core business strategies resulting from the difficulties many of our competitors face in our markets.”

Operating Results

In addition to the results presented in accordance with Generally Accepted Accounting Principles ("GAAP"), ConnectOne routinely supplements its evaluation with an analysis of certain non-GAAP financial measures including net income available to common stockholders excluding non-core items. ConnectOne believes these non-GAAP financial measures, in addition to the related GAAP measures, provide meaningful information to investors in understanding our operating performance and trends, and facilitates comparisons with the performance of peers. Reconciliations of non-GAAP disclosures used in this earnings release to the comparable GAAP measures are provided in the accompanying tables.

Third quarter 2016 results reflect the following non-core items: $1.1 million of income resulting from accretion of purchase accounting fair value marks; $0.2 million in additional loan loss provision related to the maturity and extension of acquired portfolio loans; $5.0 million in additional provision associated with the Bank’s New York City taxi medallion loan portfolio; $4.1 million of net securities gains; $0.1 million of pension settlement expenses, which had no impact on total stockholders’ equity or book value per share, and $0.2 million in amortization of intangible assets. Excluding these non-core items, along with related income tax impact, net income available to common stockholders was $12.0 million, or $0.40 per diluted share, for the third quarter of 2016, $11.4 million, or $0.38 per diluted share, for the second quarter of 2016, and $10.5 million, or $0.35 per diluted share, for the third quarter of 2015. 

Fully taxable equivalent net interest income for the third quarter of 2016 was $33.8 million, an increase of $0.7 million, or 2.0%, from the second quarter of 2016. This was the result of a 3.3% increase in average interest-earning assets, partially offset by an 8 basis-point contraction of the net interest rate margin. Included in net interest income was accretion and amortization of purchase accounting adjustments of $1.0 million during the third quarter of 2016 and $1.2 million in the second quarter of 2016.  Excluding these purchase accounting adjustments, the adjusted net interest margin was 3.22% in the third quarter of 2016, contracting by 6 basis points from the second quarter of 2016 adjusted net interest margin of 3.28%. The decrease in the adjusted net interest margin was primarily attributable to an increase in average cash balances held at the Federal Reserve Bank.

Fully taxable equivalent net interest income for the third quarter of 2016 increased by $3.4 million, or 11.1%, from the same quarter of 2015. This was a result of a 17.4% increase in average interest-earning assets due to significant organic loan growth, partially offset by an 18 basis-point contraction of the net interest margin. Included in net interest income was accretion and amortization of purchase accounting adjustments of $1.0 million during the third quarter of 2016 and $1.3 million in the same quarter of 2015.  Excluding these purchase accounting adjustments, the current quarter’s adjusted net interest margin was 13 basis points lower than the 2015 third quarter adjusted net interest margin of 3.35%.  The reduction in the adjusted net interest margin was due primarily to higher level of cash balances held at the Federal Reserve Bank and an increase in rates paid on deposits.

Noninterest income totaled $5.6 million in the third quarter of 2016, $1.6 million in the second quarter of 2016 and $3.8 million in the third quarter of 2015. Net securities gains were $4.1 million for the third quarter of 2016, $0.1 million for the second quarter of 2016 and $2.1 million for the third quarter of 2015. Excluding the securities gains, noninterest income remained relatively flat from the sequential quarter.  At the end of the third quarter of 2016, the Bank purchased an additional $17 million in BOLI, which is expected to result in increased noninterest income in future quarters.  Noninterest income also includes deposit fees, annuities and life insurance commissions, and gains on sales of residential mortgages in the secondary market.   

Noninterest expenses totaled $14.6 million for the third quarter of 2016, up modestly from $14.4 million for the second quarter of 2016, due to flat salaries and employee benefits expense and a slight increase in various other expense categories. Noninterest expenses were up $1.3 million for the third quarter of 2016 when compared to $13.3 million for the third quarter of 2015.  The increase was largely attributable to increases in salaries and employee benefits ($0.9 million), FDIC insurance premiums ($0.2 million) and occupancy and equipment ($0.1 million).  The increases over the prior year third quarter were the result of increased levels of business and staff resulting from organic growth.

Income tax expense was $5.4 million for the third quarter of 2016, compared to $5.0 million for the second quarter of 2016 and $5.2 million for the third quarter of 2015, resulting in effective tax rates of 31.5% in 2016 and 32.5% in 2015. The effective tax rate for the full year 2016 is expected to remain at approximately 31.5%.

Asset Quality

The provision for loan and lease losses increased to $6.8 million in the third quarter of 2016 from $3.8 million in the second quarter of 2016, and from $4.2 million in the third quarter of 2015.  The increases were largely attributable to an increase in additional reserves specifically allocated to the Bank’s NYC-only taxi medallion portfolio.

As of September 30, 2016, loans secured by New York City taxi medallions totaled $102.7 million. Troubled debt restructurings associated with this portfolio totaled $95.2 million and total nonaccrual loans were $3.7 million at quarter-end. Troubled debt restructurings increased by $7.2 million from the second quarter of 2016, while nonaccrual loans decreased by $0.2 million, resulting from partial charge-offs.  Specific reserves for taxi medallion loans totaled $12.5 million, or 12.2%, of total taxi medallion portfolio.  The Bank’s valuation of a corporate medallion, which represent approximately 95% of total exposure, was approximately $700 thousand as of September 30, 2016, down from approximately $750 thousand as of June 30, 2016. 

Nonperforming assets, which includes nonaccrual loans and other real estate owned, were $12.1 million at September 30, 2016, $23.3 million at December 31, 2015, and $16.1 million at September 30, 2015. Nonperforming assets as a percent of total assets were 0.28% at September 30, 2016, 0.58% at December 31, 2015, and 0.42% at September 30, 2015. Annualized net charge-offs were 0.22% for the third quarter of 2016, 0.01% for the second quarter of 2016, and 0.02% for the third quarter of 2015. The allowance for loan and lease losses was $37.6 million, representing 1.09% of loans receivable and 327.3% of nonaccrual loans at September 30, 2016. At December 31, 2015, the allowance was $26.6 million representing 0.86% of loans receivable and 128.1% of nonaccrual loans, and at September 30, 2015, the allowance was $21.5 million representing 0.73% of loans receivable and 167.1% of nonaccrual loans. In purchase accounting, any allowance for loan and lease losses on an acquired loan portfolio is reversed and a credit risk discount is applied directly to the acquired loan balances. In Management’s opinion, a useful non-GAAP metric is the ratio of allowance for loan and lease losses plus the credit risk discount to total loans receivable. This non-GAAP ratio was 1.39% at September 30, 2016, 1.28% at December 31, 2015, and 1.20% at September 30, 2015. (See Supplemental GAAP and non-GAAP Financial Measures).

Selected Balance Sheet Items

At September 30, 2016, the Company’s total assets were $4.3 billion, an increase of $312 million from December 31, 2015. Total loans at September 30, 2016 were $3.5 billion, reflecting net loan growth (loan originations less pay-downs and pay-offs) of $362 million from December 31, 2015, primarily attributable to multifamily ($80 million, including a $28 million loan reclassified during the first quarter of 2016 as multifamily from other commercial real estate), commercial and industrial (“C&I”) ($79 million), other commercial real estate ($62 million, including the aforementioned reclassification) and construction ($142 million), which reflected higher utilization of existing construction facilities.  The growth in loans was primarily funded with increases in deposits.

During the third quarter of 2016, the Company transferred its held-to-maturity investment securities (approximately $210 million) to available-for-sale designation.  Transferred securities were recorded at fair market value in the available-for-sale portfolio and any gains or losses were recorded in other comprehensive income, net of any deferred tax obligation.  This transfer will enhance liquidity and increase flexibility with regard to asset-liability management and balance sheet composition.  In addition, the Company sold approximately $75 million of investment securities with an approximate weighted average book yield of 2.80%, approximate duration of 6.5 years, and average risk weighting of approximately 50%, resulting in a net securities gain of $4.1 million.

The Company’s stockholders’ equity was $500 million at September 30, 2016, an increase of $22 million from December 31, 2015. The increase in stockholders’ equity was primarily attributable to an increase of $26 million in retained earnings, approximately $2 million of equity issuance related to stock-based compensation, including the exercise of stock options, and an increase in accumulated other comprehensive income of $5 million, offset by an $11 million payoff of SBLF preferred stock. As of September 30, 2016, the Company’s tangible common equity ratio and tangible book value per share were 8.39% and $11.60, respectively. As of December 31, 2015, the tangible common equity ratio and tangible book value per share were 8.18% and $10.51, respectively. Total goodwill and other intangible assets were approximately $149 million and $150 million as of September 30, 2016 and December 31, 2015, respectively.

About ConnectOne Bancorp, Inc.

ConnectOne is a New Jersey corporation and a registered bank holding company pursuant to the Bank Holding Company Act of 1956, as amended, and serves as the holding company for ConnectOne Bank ("the Bank"). The Bank is a community-based, full-service New Jersey-chartered commercial bank that was founded in 2005. The Bank operates from its headquarters located at 301 Sylvan Avenue in the Borough of Englewood Cliffs, Bergen County, New Jersey, and through its 20 other banking offices.

For more information visit https://www.ConnectOneBank.com/.

Forward-Looking Statements

This news release contains certain forward-looking statements which are based on certain assumptions and describe future plans, strategies and expectations of the Company. These forward-looking statements are generally identified by use of the words "believe," "expect," "intend," "anticipate," "estimate," "project," or similar expressions. The Company's ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to, those factors set forth in Item 1A – Risk Factors of the Company’s Annual Report on Form 10-K, as filed with the Securities Exchange Commission, and changes in interest rates, general economic conditions, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in the Company's market area and accounting principles and guidelines. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

CONNECTONE BANCORP, INC. AND SUBSIDIARIES     
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION     
(dollars in thousands)     
 September 30, December 31, September 30,
  2016   2015   2015 
 (unaudited) (audited) (unaudited)
ASSETS     
Cash and due from banks$  49,028  $  31,291  $  30,100 
Interest-bearing deposits with banks   184,766     169,604     128,421 
Cash and cash equivalents   233,794     200,895     158,521 
      
Investment securities:     
Available-for-sale   338,459     195,770     224,214 
Held-to-maturity (fair value of $ - , $230,558, $234,493)   -     224,056     227,221 
      
Loans held-for-sale   15,112     -     990 
      
Loans receivable   3,445,476     3,099,007     2,953,381 
Less: Allowance for loan and lease losses   37,615     26,572     21,533 
Net loans receivable   3,407,861     3,072,435     2,931,848 
      
Investment in restricted stock, at cost   24,535     32,612     30,362 
Bank premises and equipment, net   22,112     22,333     21,523 
Accrued interest receivable   12,497     12,545     11,662 
Bank-owned life insurance   97,644     78,801     53,681 
Other real estate owned   626     2,549     3,244 
Goodwill   145,909     145,909     145,909 
Core deposit intangibles   3,281     3,908     4,125 
Other assets   25,974     24,096     24,126 
Total assets$  4,327,804  $  4,015,909  $  3,837,426 
      
LIABILITIES     
Deposits:     
Noninterest-bearing$  655,683  $  650,775  $  586,643 
Interest-bearing   2,613,266     2,140,191     2,079,981 
Total deposits   3,268,949     2,790,966     2,666,624 
Borrowings   481,337     671,587     621,674 
Subordinated debentures (net of $665, $812, $827 debt issuance costs)   54,490     54,343     54,328 
Other liabilities   23,440     21,669     23,654 
Total liabilities   3,828,216     3,538,565     3,366,280 
      
COMMITMENTS AND CONTINGENCIES     
      
STOCKHOLDERS' EQUITY     
Preferred stock   -     11,250     11,250 
Common stock   374,287     374,287     374,287 
Additional paid-in capital   10,409     8,527     8,315 
Retained earnings   130,885     104,606     97,321 
Treasury stock   (16,717)    (16,717)    (16,717)
Accumulated other comprehensive gain (loss)   724     (4,609)    (3,310)
Total stockholders' equity   499,588     477,344     471,146 
Total liabilities and stockholders' equity$  4,327,804  $  4,015,909  $  3,837,426 
      

 

CONNECTONE BANCORP, INC. AND SUBSIDIARIES        
CONSOLIDATED STATEMENTS OF INCOME        
(dollars in thousands, except for per share data)         
          
   Three Months Ended September 30,   Nine Months Ended September 30,  
   2016    2015    2016    2015   
Interest income  (unaudited)  
Interest and fees on loans $  37,803  $  32,276  $  109,381  $  91,807  
Interest and dividends on investment securities:         
Taxable    1,774     2,669     5,879     8,340  
Tax-exempt    988     901     2,867     2,666  
Dividends    352     297     1,074     797  
Interest on federal funds sold and other short-term investments   261     43     541     127  
Total interest income    41,178     36,186     119,742     103,737  
Interest expense         
Deposits    5,159     3,655     13,532     9,980  
Borrowings    2,995     2,804     9,472     7,060  
Total interest expense    8,154     6,459     23,004     17,040  
          
Net interest income    33,024     29,727     96,738     86,697  
Provision for loan and lease losses    6,750     4,175     13,500     7,550  
Net interest income after provision for loan and lease losses   26,274     25,552     83,238     79,147  
          
Noninterest income         
Annuities and insurance commissions    68     77     140     210  
Income on bank owned life insurance    615     388     1,843     1,162  
Net gains on sale of loans held-for-sale    56     63     147     276  
Deposit, loan and other income    706     1,224     1,984     2,145  
Insurance recovery    -     -     -     2,224  
Net gains on sale of investment securities    4,131     2,067     4,234     2,793  
Total noninterest income    5,576     3,819     8,348     8,810  
          
Noninterest expenses         
Salaries and employee benefits    7,791     6,905     23,143     20,480  
Occupancy and equipment    2,049     1,916     6,450     5,785  
FDIC insurance    745     535     1,955     1,535  
Professional and consulting    667     836     2,078     2,045  
Marketing and advertising    293     247     817     634  
Data processing    1,002     957     3,036     2,686  
Loss on extinguishment of debt    -     -     -     2,397  
Amortization of core deposit intangible    193     217     627     700  
Other expenses    1,811     1,688     5,150     4,643  
Total noninterest expenses    14,551     13,301     43,256     40,905  
          
Income before income tax expense    17,299     16,070     48,330     47,052  
Income tax expense    5,443     5,228     15,224     15,309  
Net income    11,856     10,842     33,106     31,743  
Less: Preferred stock dividends    -     28     22     84  
Net income available to common stockholders $  11,856  $  10,814  $  33,084  $  31,659  
          
Earnings per common share:         
Basic $  0.39  $  0.36  $  1.10  $  1.06  
Diluted $  0.39  $  0.36  $  1.09  $  1.04  
Weighted average common shares outstanding:         
Basic    30,125,287     29,636,001     30,100,057     29,786,374  
Diluted    30,401,684     30,108,103     30,376,085     30,323,376  
Dividends per common share $  0.075  $  0.075  $  0.225  $  0.225  
          


ConnectOne's management believes that the supplemental financial information, including non-GAAP measures, provided below is useful to investors. The non-GAAP measures should not be viewed as a substitute for financial results determined in accordance with GAAP, and are not necessarily comparable to non-GAAP financial measures presented by other companies. 
          
CONNECTONE BANCORP, INC.         
SUPPLEMENTAL GAAP AND NON-GAAP FINANCIAL MEASURES        
(dollars in thousands, except share data)         
 As of
 Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30,
  2016   2016   2016   2015   2015 
Selected Financial Data         
Total assets$  4,327,804  $  4,262,914  $  4,091,000  $  4,015,909  $  3,837,426 
Loans receivable:         
  Commercial   644,430     630,425     601,708     570,116     569,605 
  Commercial real estate-other   1,139,641     1,104,214     1,087,388     1,085,615     1,052,982 
  Commercial real estate-multifamily   961,163     967,555     940,913     881,081     820,732 
  Commercial construction   471,109     443,277     402,594     328,838     283,623 
  Residential   229,401     230,497     231,319     233,690     225,158 
  Consumer   2,879     1,976     1,851     2,454     3,569 
  Gross loans   3,448,623     3,377,944     3,265,773     3,101,794     2,955,669 
Unearned net origination fees   (3,147)    (2,324)    (1,960)    (2,787)    (2,288)
  Loans receivable   3,445,476     3,375,620     3,263,813     3,099,007     2,953,381 
  Loans held-for-sale   15,112     360     -     -     990 
Total loans   3,460,588     3,375,980     3,263,813     3,099,007     2,954,371 
          
Securities available-for-sale   338,459     208,266     191,331     195,770     224,214 
Securities held-to-maturity   -     214,718     219,373     224,056     227,221 
Goodwill and other intangible assets   149,190     149,383     149,600     149,817     150,034 
Deposits:         
 Noninterest-bearing   655,683     648,664     614,507     650,776     586,643 
 Interest-bearing   531,500     523,742     517,810     490,379     465,552 
 Savings   207,717     210,040     219,865     216,399     220,199 
 Money market   866,710     866,643     678,222     658,695     611,743 
 Time deposits   1,007,339     951,904     862,667     774,717     782,487 
Total deposits   3,268,949     3,200,993     2,893,071     2,790,966     2,666,624 
          
Borrowings   481,337     496,414     646,501     671,587     621,674 
Subordinated debentures (net of issuance costs)   54,490     54,441     54,392     54,343     54,328 
Total stockholders' equity   499,588     484,414     474,727     477,344     471,146 
          
Quarterly Average Balances         
Total assets$  4,344,795  $  4,212,307  $  4,034,375  $  3,891,885  $  3,729,503 
Loans receivable:         
  Commercial   632,892     626,902     585,773     579,512     567,737 
  Commercial real estate (including multifamily)   2,081,741     2,056,263     2,005,872     1,919,263     1,811,745 
  Commercial construction   462,399     418,769     361,108     313,223     255,627 
  Residential   229,953     231,553     236,404     232,022     227,051 
  Consumer   2,771     2,865     2,670     3,269     3,013 
  Gross loans   3,409,756     3,336,352     3,191,827     3,047,289     2,865,173 
Unearned net origination fees   (2,956)    (2,295)    (2,397)    (2,706)    (2,102)
  Loans receivable   3,406,800     3,334,057     3,189,430     3,044,583     2,863,071 
          
Securities available-for-sale   263,656     200,050     222,776     219,927     260,211 
Securities held-to-maturity   143,146     218,220     194,474     225,875     229,483 
Goodwill and other intangible assets   149,317     149,525     149,741     149,959     150,178 
Deposits:         
 Noninterest-bearing   640,323     581,743     609,312     608,227     560,129 
 Interest-bearing   553,401     528,954     503,896     476,237     480,685 
 Savings   211,162     215,267     215,491     216,149     220,481 
 Money market   872,937     791,845     656,557     636,180     582,238 
 Time deposits   1,007,530     889,561     807,801     783,068     787,262 
Total deposits   3,285,353     3,007,370     2,793,057     2,719,861     2,630,795 
          
Borrowings   488,015     639,054     684,469     621,615     544,774 
Subordinated debentures   55,155     55,155     55,155     55,155     55,155 
Total stockholders' equity   495,141     483,519     482,503     478,919     471,682 
                    
 Three Months Ended
 Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30,
GAAP Earnings Data 2016   2016   2016   2015   2015 
Net interest income$  33,024  $  32,394  $  31,320  $  30,456  $  29,727 
 Provision for loan and lease losses   6,750     3,750     3,000     5,055     4,175 
Net interest income after provision for loan and lease losses   26,274     28,644     28,320     25,401     25,552 
Noninterest income         
 Annuity and insurance commissions   68     32     40     32     77 
 Bank-owned life insurance   615     616     612     620     388 
 Net gains on sale of loans held-for-sale   56     56     35     51     63 
 Deposit, loan and other income   706     763     515     522     1,224 
 Net gains on sale of investment securities   4,131     103     -     1,138     2,067 
   Total noninterest income   5,576     1,570     1,202     2,363     3,819 
Noninterest expenses         
 Salaries and employee benefits   7,791     7,753     7,599     7,205     6,905 
 Occupancy and equipment   2,049     2,154     2,247     1,802     1,916 
 FDIC insurance   745     615     595     575     535 
 Professional and consulting   667     700     711     906     836 
 Marketing and advertising   293     250     184     213     247 
 Data processing   1,002     1,010     1,024     1,017     957 
 Amortization of core deposit intangible   193     217     217     217     217 
 Other expenses   1,811     1,653     1,776     1,644     1,688 
   Total noninterest expenses   14,551     14,352     14,353     13,579     13,301 
Income before income tax expense   17,299     15,862     15,169     14,185     16,070 
 Income tax expense   5,443     5,003     4,778     4,617     5,228 
Net income (GAAP)$  11,856  $  10,859  $  10,391  $  9,568  $  10,842 
          
 Three Months Ended
 Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30,
  2016   2016   2016   2015   2015 
Net income (GAAP)   11,856     10,859     10,391     9,568     10,842 
Less: preferred dividends   -      -      22     28     28 
Net income available to common stockholders (GAAP)   11,856     10,859     10,369     9,540     10,814 
          
Reconciliation of GAAP Earnings to Operating Earnings         
Net gains on sales of securities$  (4,131) $  (103) $  -  $  (1,138) $  (2,067)
Partial settlements of pension obligation   69     87     103     106     168 
Amortization of intangible assets   193     217     217     217     217 
Provision related to maturity and extension of acquired portfolio loans   220     229     397     512     590 
Provision related to taxi cab medallion loans   5,000     1,750     1,487     2,500     2,000 
Provision for pending disposition of  Union Center operations bldg.   -     -     -     1,304     - 
Accretion of purchase accounting fair value marks   (1,077)    (1,277)    (1,367)    (1,416)    (1,340)
Non-core items   274     903     837     2,085     (432)
Income tax (expense) benefit   99     326     301     751     (156)
Non-core items, after taxes (36%)   175     577     536     1,334     (276)
Core earnings available to common stockholders (non-GAAP)$  12,031  $  11,436  $  10,905  $  10,874  $  10,538 
Weighted average diluted shares outstanding 30,401,684   30,340,376     30,257,676     30,310,905     30,335,571 
Diluted EPS (GAAP)$  0.39  $  0.36  $  0.34  $  0.31  $  0.36 
Core Diluted EPS (Non-GAAP) (1)   0.40     0.38     0.36     0.36     0.35 
          
Return on Assets Measures         
Core earnings available to common stockholders (non-GAAP)$  12,031  $  11,436  $  10,905  $  10,874  $  10,538 
Add: preferred dividends   -      -      22     28     28 
Core net income (non-GAAP)$  12,031  $  11,436  $  10,927  $  10,902  $  10,566 
Average assets$  4,344,795  $  4,212,307  $  4,034,375  $  3,891,885  $  3,729,503 
Less: average intangible assets   (149,317)    (149,525)    (149,741)    (149,959)    (150,178)
Average tangible assets$  4,195,478  $  4,062,782  $  3,884,634  $  3,741,926  $  3,579,325 
Return on avg. assets (GAAP) 1.09%  1.04%  1.04%  0.98%  1.15%
Core return on avg. assets (Non-GAAP) (2) 1.10%  1.09%  1.09%  1.11%  1.12%
Return on avg. tangible assets (Non-GAAP) (3) 1.14%  1.09%  1.09%  1.03%  1.22%
Core return on avg. tangible assets (Non-GAAP) (4) 1.14%  1.13%  1.13%  1.16%  1.17%
_____         
(1) Represents core earnings available to common stockholders divided by weighted average diluted shares outstanding.
(2) Core net income divided by average assets.
(3) Net income excluding amortization of intangible assets divided by average tangible assets.
(4) Core net income divided by average tangible assets.
 Three Months Ended
 Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30,
  2016   2016   2016   2015   2015 
Return on Equity Measures         
Core earnings available to common stockholders$  12,031  $  11,436  $  10,905  $  10,874  $  10,538 
          
Average common equity$  495,141  $  483,519  $  473,849  $  467,669  $  460,432 
Less: average intangible assets   (149,317)    (149,525)    (149,741)    (149,959)    (150,178)
Average tangible common equity$  345,824  $  333,994  $  324,108  $  317,710  $  310,254 
          
Return on avg. common equity (GAAP) 9.53%  9.03%  8.80%  8.09%  9.32%
Core return on avg. common equity (non-GAAP) (5) 9.67%  9.51%  9.26%  9.23%  9.08%
Return on avg. tangible common equity (non-GAAP) (6) 13.77%  13.23%  13.03%  12.07%  13.99%
Core return on avg. tangible common equity (non-GAAP) (7) 13.84%  13.77%  13.53%  13.58%  13.47%
          
Efficiency Measures         
Total noninterest expenses$  14,551  $  14,352  $  14,353  $  13,579  $  13,301 
Partial settlements of pension obligation   (69)    (87)    (103)    (106)    (168)
Foreclosed property expense   (37)    10     (167)    (387)    (121)
Amortization of intangible assets and fair value marks   (193)    (217)    (217)    (217)    (217)
Operating noninterest expense $  14,252  $  14,058  $  13,866  $  12,869  $  12,795 
          
Net interest income (FTE)$  33,762  $  33,112  $  31,985  $  31,102  $  30,382 
Impact of purchase accounting fair value marks   (1,045)    (1,245)    (1,335)    (1,384)    (1,314)
Noninterest income   5,576     1,570     1,202     2,363     3,819 
Net gains on sales of securities   (4,131)    (103)    -     (1,138)    (2,067)
Operating revenue $  34,162  $  33,334  $  31,852  $  30,943  $  30,820